In Which We Try to Take Advantage of a Real Estate Tsunami
When we began going to PV in 2006, it was in the midst of a building boom hard to describe. For years PV had been a relatively small tourist town best known for fishing, good beaches and lively nightlife. Nestled against the mountains, it was never going to be as big or commercial as Cancun or Acapulco. Then us Baby Boomers must have found it and the go-go days began, with new hotels, condos and shopping centers springing up all along the Banderas Bay. Every trip down brought new arrivals: Walmart, CostCo, Home Depot, Office Max, a high end shopping center, more super mercados and FIVE Starbucks. Finding a new finished condo was nearly impossible, so people began putting down pre-construction deposits on planned paradises.
We flew to PV on our anniversary in 2006 on a whim and a prayer of finding some place on the beach we could eventually call home. That thought was quickly killed as prices for anything with “beach” in it were $500K and up – and I mean up! Spending a couple of million was not unusual. There were lots of villas in the high seven and low eights. We were shocked and depressed until we stumbled on Little Big Sur (or what would eventually become LBS) in the jungle south of PV. We had found our beach place at something we could afford. Granted, it wasn’t exactly a house since it had no walls, but that’s another story. None the less, we made PV our home away from home.
None of us knew it, but PV (and Mexico) was about to be hit by a Perfect Storm of economic disaster. First up was the tsunami from the US housing market earthquake. Pre-construction deposits stopped, construction was slowed on most of the developments, and “Se Vende” signs sprung up everywhere. Then the H1N1 virus scare pretty much stopped all tourist traffic (and was probably the nail in the Mexicana Airlines’ coffin). Finally, Americans and Mexicans read daily newspaper stories on the escalating Narco Wars. Add all this up and you get restaurants that are half empty, condos that are half built, streets that you can cross without fear of being run-over, and shops closing for the off-season never to return.
The mood amongst Vallartans was never grim, however, as Puerto Vallarta is and always will be a party town. But the exuberance that once flowed through everything was gone. Vallartan’s were quietly holding their breadths, hoping that it would all blow over – and soon!
Into this Perfect Economic Storm, Karen and I came looking to buy a place. I admit that I was pretty exuberant having been on the other end of the stick just weeks prior. This was our opportunity to find our perfect place at a price we could afford and I was pretty obnoxious in expressing this goal.
As usual, KR and I approached buying real estate from different perspectives. I was open for a bigger house in a borderline neighborhood, so I could store all our vehicles. I wanted to build a Man Cave. I was also in no hurry and definitely in the Manana frame of mind about buying a place. I felt that the market was going south, not north, any time soon.
Karen wasn’t into fixing a place up, didn’t really care about a garage, wanted to be in central PV so we could be close to the action, and definitely wanted to find a place yesterday so she could start making a new nest. Our negotiated Want List included a pool, view, at least two bedrooms, a garage and a price less than $350K.
Karen flew down to PV in mid-May to begin looking. First thing she did was one of our best moves — we hired Harriet Murray as our Real Estate Agent and How-to-Live-in-Puerto Vallarta Expert. Harriet not only knows real estate but she’s worked with enough Gringos-in-a-Strange-Land to be a walking encyclopedia of how to make The Move.
Looking at real estate is different in PV. First off, there is no one source of all things for sale – an equivalent to the MLS—but rather several privately aggregated lists and the listings from the various real estate agents. The best way of finding out about new places is to always be looking, talking with other agents/owners, going to events, and monitoring web sites. New places were being discovered every day. Between the three of us – Harriet, Karen and me – we looked at dozens and dozens of places either virtually or figuratively. At the end of each day KR and I would have a Skype call comparing places and talking about pros and cons. My favorite metric for any house was “Days on the Market”. It wasn’t unusual for this number to be way over 300 days – easily into the 700 day range. Can you see the smile?
Moving to a new city is full of surprises, even if you think you know the place pretty well. We thought we knew the town pretty well, beyond just being tourists, as we had spent a lot of time scouring the back streets looking for stoves, cement, beds, furniture, tools and the like. We’d gotten around via buses, land and water taxis, and rental cars. One of the reasons we had selected PV was we were comfortable there
Yet, we were to find out there is a big difference between visiting a place (even often) and living there. In a little more than three days, Harriet drove us through more of PV than I’d seen in all the years coming down. I got to know all the little neighborhoods, appreciate their quirks and nuances, and came to see even more of the non-tourist part of PV. Verseilles, Conchas Chinas, El Centro, Amapas, Romantic Zone, Marina, the Hotel Zone, Las Gaviotas, the Marina, Gringo Gulch, and many more.
Some of these neighborhoods were mostly Gringos or other foreigners, some were mainly Mexican, and many were a combo. Conchas Chinas, for example, is informally known as the Beverly Hills of PV. Located in the hills immediately south of Old Town and along the coast, Conchas Chinas was quiet, secluded, and features condos and villas with breathtaking views of the Bay and the City. Because of the downturn, we could afford to look in Conchas Chinas and it was very, very seductive. One of the finalists in our search, “Casa Romantica #5” (all homes have names in PV), with stunning views, a gorgeous pool, a garage, outdoor grill, a beautiful kitchen and well…just about everything.
But like its namesake, CC was insulated from the rest of PV. Reachable only by car because of the steep hills, the CC lifestyle meant days and evenings hang’n at home rather than an easy walk down the street. Could we live the vacation lifestyle 24/7?
We learned that when someone describes a neighborhood as Mexican, it’s a code word for loud. As in people, kids, chickens, cars, and music all at high volumes, at all times of the day and night. It usually also means dirt streets and unfinished houses (this sounds a lot worse than it is, these are often charming places, but just rough around the edges) and far from the beach.
We weren’t ready for “Full Mexican,” but were up for a mixed neighborhood of Gringos and Mexicans like El Centro. As its name implies, El Centro is the center of PV and is one of the oldest parts of town. We liked the El Cerro section quite a bit – in the hills above the main town. It had cobble stone streets, a mix of Mexicans and foreigners, a few restaurants and hole-in-the-wall shops, and was close to everything.
KR (and I admit me too) fell in love with a converted 100 year-old adobe house named Casa Rana in El Cerro. It had been totally redone to make it a charming mini-hacienda with all the modern conveniences on the inside, yet it looked like a small, old adobe house on the outside. At 2100 square feet, it was huge for all standards, with two bedrooms and an office.
Of course, there were significant downsides to Casa Rana. No air conditioning, no pool, no view, no garage and it was was going to be loud. It was on one of the main north/south routes through PV which meant there was traffic at all hours of the day. This problem was made all the worse as this “main thoroughfare” was less than a car width wide, meaning it was impossible to keep tiles on the roof as trucks keep knocking them down.
Before we got on the plane back to LA, we’d made an offer on Casa Rana, had back and forth counters, and made an offer on Casa Romantica in between. We finally made a deal on Casa Rana a few days after getting back.
Wow, I guess we’re really doing this…